The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

A quick lap around the financial press, social media and cable television can sometimes make it seem pretty easy to play the presidential election through the stock market.

Republicans love defense, the story goes, so if Mitt Romney wins on Tuesday potential budget cuts will be reduced and defense contractors will be off to the races. On the flip side the conventional wisdom says President Barack Obama's green energy initiatives could get more of a push in a second administration, so loading up on solar stocks is the play before Election Day.

Chris Bertelsen certainly has his views on which stocks and sectors might do better under different candidates, but he's not interested in playing that game. "We want to be neutrally positioned before the election," he said in a conversation Tuesday, when Wall Street was still waiting to see whether the stock market would reopen, and in what condition, Wednesday.

Bertelsen, chief investment officer at Sarasota, Fla.-based Global Financial Private Capital, which manages about $1.5 billion, says he would rather miss a bit of a move than be proven wrong post-election. The firm recently sold a coal holding after a big run, figuring the stock might be pricing in a Romney win.

"You have to leave politics at the door," he says. "You don't want to count on Romney and have a bunch of coal stocks, or Obama and buy a bunch of hospital stocks, only to find out it's already priced in or you're wrong."

Plenty of investors are in a bit of a wait-and-see mode ahead of the election, and not just because they aren't sure whether Obama or Romney will be the victor. Uncertainty abounds over the makeup of Congress as well, and either presidential candidate could face high hurdles to winning support for his agenda.

"People are so defensive right now," says Rick Fier, a trader at Conifer Securities. "A lot missed the August/September rally and weren't willing to chase it." Now, with the election at hand "everybody is sitting on their hands," he says. "I'd call myself a nervous long," Fier adds. "People aren't making big bets, I can't see that changing immediately."

While Bertelsen is being cautious around the election he is hardly checking out, staying vigilant for opportunities that fall too far, mentioning pharma laggard Bristol-Myers Squibb among the names he has been watching.

For the broader market, he sees the potential for gains ahead if anything gets done on the fiscal cliff. "I feel we're pricing in an awful lot of uncertainty," Bertelsen says. He is sitting on a comfortable amount of cash though, about 20%, but not because he expects a big selloff. "I'm not out buying ultra-short anything," he says, but his gut tells him there will be opportunities to buy stocks he likes on pullbacks in the weeks to come.

One he likes is Lowe's, which has lagged rival Home Depot. "We think it's a catch-up name with some of the same characteristics [of its rival]," and the company has a long track record of delivering earnings growth to shareholders via increasing dividends.

For a client base made up largely of seniors, savers and retirees, Berltesen says his firm zeroes in on getting a steady return that is reliable. "We've become yield grabbers around the world," he says, and one target has been the telecom space because of what he calls "the Apple economy."

More and more mobile device users around the world are converting to smartphones, but to Bertelsenthe low-hanging fruit has already been plucked by investors as Apple shares surged to more than $700 before a recent correction. Instead, he plays it through the telecommunications providers offering the services needed to utilize an iPhone or devices based on Google's Android system.

Companies like Verizon and AT&T, as well as telecom players in Asian countries like Korea and Singapore, are the steady, income-providing plays on the smartphone space Berltesen likes, and he isn't particularly concerned about who will be president when he invests in them.

"The story is they won't be companies that are up 10 or 15% in a typical year," he says. "AT&T up 15% this year is an embarrassment for me." Bertelsen is in the stocks for the cash they return to shareholders, not to count on a big price jump. AT&T currently yields 5% and Verizon 4.6%, and some of the overseas names offer even fatter yields. "Their dividend checks don't bounce," he quips.